The number of mobile connections in South Korea reached 44.27m at the end of March 2008, with just under 260.0k net additions in the month. This was 21% lower than the March 2007 figure of 329.1k. On a quarterly basis growth was also down, with net additions of 768.5k in Q1 08 compared to 904.1k in Q1 07, and proportionate growth falling from 2.2% to 1.8%. However, the Q1 08 growth rate was higher than the rates recorded in both Q1 05 and Q1 06, and on a rolling annual basis the growth rate of 7.7% was the third highest over the past three years behind the 7.8% and 8.2% rates of Q3 07 and Q4 07 respectively.

This is despite the fact that penetration hit exactly 90% at the end of March.

The South Korean market remains highly segmented, with market leader SK Telecom (SKT) over 8m customers ahead of nearest rival KT Freetel (KTF). At the end of March, SKT had 22.37m customers compared to 13.94m for KTF, while third-placed LG Telecom (LGT) was around 6m adrift on 7.96m. LGT had the highest annual growth rate with a 10.3% yearly uplift to customer numbers, while SKT recorded a 7.9% rate and KTF 6.0%.

On a quarterly basis, the rankings for net additions were in line with the market rankings: SKT led the way with 402.6k, ahead of KTF with 219.4k and LGT with 146.5k. This represented a turn-around for KTF, which was behind LGT for net additions in both Q2 and Q3 07. Year on year, however, KTF lost 0.5pp market share to hit 31.5%, while LGT was up 0.5pp to 18.0%.

In one respect competition has increased in South Korea: both SKT and KTF recorded their highest ever monthly churn rates, while LGT saw its highest rate since January 2005. KTF’s March 08 rate of 6.1% was 2.1pp higher than the March 07 figure, while LGT was up 0.6pp to 4.5% and SKT up 0.4pp to 3.6%. Both SKT and KTF saw gross monthly additions top 0.9m and gross monthly disconnections top 0.8m for the first time ever, while LGT saw its highest ever figure for gross monthly disconnections (0.35m) and its second highest for gross monthly additions (0.40m).

Clearly South Korean mobile customers are becoming more and more choosy as they switch between operators at unprecedented levels.

Posted to the site on 29th April 2008

This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World.

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